Random Dividend Growth Formula

Random Dividend Growth Formula

Growth of dividend can be calculated by dividing current dividend with last year dividend. It is important to note that there are three types of growth i.e. Constant Growth, Random growth and negative Growth. Random growth means that dividend is not following a trend.

Growth =            Dividend during the year    

                            Dividend of Last Year

Example

Year 1          10

Year 2          11        

Year 3          14

Year 4          16

Solution

Year                              Growth

Year 1          10

Year 2          11/10         = 10%

Year 3          14/11         = 27.27%

Year 4           16/14        = 14.28%